Spending Review targets increased house-building in UK

In the Autumn Spending Review on 25 November, UK Chancellor George Osbourne announced plans to build 400 000 homes over the course of the parliament. This falls short of the more than hundreds of thousands of homes reportedly needed each year to fill the housing deficit. The announcement was met with various reactions, some of which are included below.

Owen Goodhead, Managing Director of specialist recruiter Randstad CPE, commented: “From an industry standpoint, questions still surround the Chancellor’s figures for new homes. The first question might be when? It is widely accepted that the UK needs 300 000 new homes per year. On that basis 400 000 homes represents just 16 months of necessary supply. The numbers signal a welcome intention to tackle housebuilding – but these figures need to be examined further. A cumulative building effort on this scale would be far too small by the end of the decade.

“A more pressing question is who? Who will build these homes? Our analysis shows the vast gap in the capacity of the UK workforce to build homes, and the need for places to live for a growing population. As a country we need to find 100 000 carpenters, 89 000 plumbers, 27 000 bricklayers. We’re facing a shortage of 9000 floorers and 14 000 roofers. To build enough homes the UK needs to train an extra 30 000 quantity surveyors and 61 000 project managers. That is not the sort of challenge to relegate to the footnotes. A joined-up approach would explicitly connect the admirable drive for more apprenticeships with a shortage of homes.

“In order to tackle any credible amount of houses being built before the end of the decade, apprenticeships will be as valuable as bricks.”

Julia Evans, BSRIA Chief Executive, said: “It is heartening that the Chancellor is ranking housebuilding high on a national scale, even if some of this is imprecise and difficult to quantify...BSRIA is encouraged that Ministers are to change planning rules to release land specifically for developing starter homes. And developers are to be offered cash from the government to construct starter homes and regenerate ‘brownfield’ land. The Chancellor has pledged 135 000 new ‘shared ownership’ homes where buyers will be able to buy an initial stake in a new property and increase their share over time if they can afford to do so. This equates to £4 billion being pumped into the scheme to provide properties for households earning less than £80 000 (or £90 000 in London). BSRIA welcomes the announcement by Treasury officials that the package represents ‘the largest programme of affordable housebuilding by a government since at least 1979 and the biggest ever programme of government building of homes for sale. Now all he has to do is deliver it.

“Today’s announcement could lead to thousands of new jobs and apprenticeships being created in the sector but we must, therefore, ensure that industry can indeed find the much-needed qualified and experienced construction employees to meet this demand. We must not let a labour shortage in this field impede progress.”

The government also announced plans for a new apprenticeship levy of 0.5% by 2020, to be paid by employers in order to fund 3 million apprenticeships. Evans commented: “[F]or construction and building services, the priority must be delivering high quality apprenticeships, viewed positively by employers. And although we finally have clarity over the threshold of the apprenticeship levy, it will trouble corporate businesses who will have to pay what is, in essence, a payroll tax. It is important that the delivery of the levy doesn’t dent other types of vocational training, which could be better suited to some businesses in the industry. Otherwise this is simply another example of ‘robbing Peter to pay Paul’ on behalf of business that will not have the desired result.”